One of the driving forces behind the heightened amount of commercial mortgage loans and transactions transpiring nationwide are low interest rates. Over the past few years, interest rates have at times dipped into historical levels. When they have increased, they have stayed low enough to remain attractive to investors and small businesses looking to acquire or refinance commercial property.

For investors, low interest rates have enabled them to acquire properties that would have been difficult otherwise. For example, multifamily deals often have thin margins when it comes to returns on their investments and low interest rates allows greater returns when they can borrow money at a reduced rates. This is one of the reasons most markets have seen average prices escalate to record levels.

One growing concern in the industry is how long rates will remain low. The Wall Street Journal reported last week that the Federal Reserve is sticking to their plan to raise rates before the end of the year. Many experts have hoped they would indefinitely postpone this decision, but it appears likely to happen unless there are some dramatic changes in the economy in the next few months.

So what does this means for small businesses and investors seeking commercial mortgages? For one, it is important to recognize that even if rates go up, they will still remain below the high levels seen in the late 1990’s and early 2000’s. This is not the end of the world. The largest impact will be seen by those looking to buy multi-million dollar commercial properties, but for those seeking loans in the range of $50,000 to $5 million, they will likely see a nominal effect. Furthermore, it is still a great time for small businesses to take advantage SBA loan programs and USDA loan programs.

The bottom line for those small businesses and investors who have been on the proverbial fence as to whether or not they should pull the trigger on a new commercial mortgage is to consider acting now rather than later. For those that decide to wait, there is a good chance they may pay a bit more whether they are obtaining a fixed rate commercial loan, variable rate loan or interest only loans.

Furthermore, K2 Commercial Mortgage can help you obtain fast loans without a lot of the hassle. In fact, we have a proven track record of getting deals done that traditional banks would turn their back to. We also specialize in working with bad credit loans so don’t let the mistakes of your past get in the way of taking advantage of current rates.

No one has a crystal ball to accurately predict what might happen in the coming months, but based upon what is transpiring, it may be better to act sooner rather than later on a new commercial mortgage or refinancing an existing one. However, for those small businesses that decide to wait, don’t fret because the expected changes are not a worst-case scenario.

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